Surfside Condo Board President Warned Residents of Worsening Damage In April

[appalachiablue]

Last edited Tue Jun 29, 2021, 02:40 PM - Edit history (2)

Source: MSN/New York Times

Less than three months before the collapse of the Champlain Towers South condo complex in Surfside, Fla., the president of the condominium association warned in a letter that the damage in the building had "gotten significantly worse" since it was highlighted in a 2018 inspection.

The letter was written to residents by Jean Wodnicki, president of the association's board of directors, explaining why a list of extensive construction projects were worth a $15 million special assessment that residents were being asked to pay.

Along with the 2018 inspection, which warned of "major structural damage," the letter, a copy of which The New York Times obtained, adds to a growing body of evidence that engineers had raised alarms about serious flaws in the building months and even years before the catastrophic building failure, which killed 11 people and left 150 unaccounted for.

Ms. Wodnicki could not immediately be reached for comment.

That 2018 inspection warned that concrete damage would "multiply exponentially" in the coming years, Ms. Wodnicki wrote in the letter, which was first reported by USA Today and The Wall Street Journal. The engineer who prepared that initial report, Frank Morabito, carried out "a much more detailed survey of the property" and found signs that this acceleration was indeed already happening...

Read more: https://www.msn.com/en-us/news/us/surfside-condo-board-president-warned-residents-of-worsening-damage-in-april/ar-AALApna

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- Also: NPR, 'Letter from Condo Board Warned Buildings' Damage Has Gotten Significantly Worse,' June 29, 2021, *Includes COPY OF THE LETTER,
https://www.npr.org/sections/live-updates-miami-area-condo-collapse/2021/06/29/1011280545/letter-from-condo-board-warned-buildings-damage-has-gotten-significantly-worse
_________

- Related: 'Surfside building collapse latest: Bidens to visit site amid search for survivors,' ABC News, June 29, 2021,
https://www.msn.com/en-us/news/us/surfside-building-collapse-latest-bidens-to-visit-site-amid-search-for-survivors/ar-AALzTkG

[llashram]

1. doesn't seem fair

that the residents would be assessed for something like this.

[enough]

2. Who should be assessed? NT

[llashram]

4. I don't know

who should be? I guess condo owners must share the cost of maintenance? Won't be buying a condo on the coast of Florida any time soon.

[Phoenix61]

8. One of the "hidden costs" of condo ownership.

Between that and HOA fees they can be surprisingly expensive to maintain.

[DanieRains]

42. Owned Multiple Condos Assessments Are Common Elevators Windows Painting Etc.

If we bought into a 30 to 40 years old building "on the ocean" anywhere with "zero real maintenance" we would be expecting a huuuuge assessment was coming. Hopefully all the owners of the collapsed building's "Real Estate Agents" in Florida warned them. Of course they didn't. I owned 2 condos on Miami. With Florida real estate it is buyer beware most of the time. The agents I dealt with in Miami would lose their license in Seattle for some of the crap I saw.

We looked at a condo for sale on Lake Washington 2 years ago. The "selling" agent said they were going to have to replace the pilings in the lake for around 20 million (note = no firm bid = could be twice that). This made the condo worth maybe $50,000 not the $250,000 they were selling it for. Of course the agent told us. This is Washington not Florida.

If you want to own a condo, do your homework. Then do more homework. And for the love of god find a real estate agent that is not just looking to get a commission, but are looking out for your best interest. And get a REAL INSPECTOR, not some friend of a friend inspector.

I am only trying to help the DU Community with this post.

I owned/own Real Estate In Miami, and all over the world.

God Help You trying to do/buy real estate in Florida or live there.

[Escurumbele]

51. "find a real estate agent that is not just looking to get a commission" All Real Estate agents get a

commission, that is how they make their money, you just have to find one who is honest, and there are plenty of them.

My recommendation is to not buy condos, no matter where they are. Besides the HOA (Home Owner's Association) fees, and the possible assessments which can be very high if you own property by the ocean, it is not a good deal, unless of course you have it as your own vacation place and you enjoy it, you don't have it as a business (that most probably measn that you have money to spare, which is OK), but if you want it as a business then get a house instead, it may be more expensive but you don't pay HOA, you are not at the mercy of the HOA, and in Florida HOA fees are extremely high, not worth it most of the time.

Also, if you want to own Ocean property as an investment, then you need to live close by, when you don't you have to hire a "Property Manager", and for what they do they charge too much, but like anything, there are good ones and there are really bad ones.

I can speak about this because I have owned condos by the ocean in Florida, and those are the reasons I don't anymore.

With houses you don't pay HOA, and the cost of maintaining a house per year is usually half of what you pay for HOA. One last thing, HOA, at least in Florida, can do pretty much whatever they want, there are very few rules to put the breaks on them, and now DeSantis has come up with his "Deregulation" ideas that will make housing in Florida to have less quality and HOA and other property management associations much richer while doing less and being accountable for less.

[Hugh_Lebowski]

54. Umm ... what?

"With houses you don't pay HOA"

Any chance you could explain this concept to my HOA?

I own single story, single family detached house, and everyone around me is paying an HOA.

[obamanut2012]

57. Um... houses do have HOAs

I've owned one, in a state not FL. And, here in SOFL, my villa condo is in an HOA, but my parents, boss, and sister all live in detached houses with nice yards and have HOAs. Friends in VA, NC, and CA same.

Your real estate adventures in SOFL may have been sketchy, but the rest of SOFL isn't Miami/Miami Beach.

[Escurumbele]

50. The builder? What did they do, or did not do that caused that kind of erosion to occur?

They will have to dig very deep and find out where the corners were cut and who was responsible for it.

$15 million assessment for faulty construction doesn't make sense. That called for a lawsuit by the owners of the condominium.

$15 million assessment comes down to 110,294.12 per unit. Imagine having to pay that much money.

Some crazy guy listed a 3-bedroom unit at that building the day after the collapse. The asking price for the 3-bd unit was $1,375,000.00, after he received a few emails he took the listing down.

[Hugh_Lebowski]

55. He was NOT in that building. There's at least 2 'sister' buildings in the area, it was one of those

And he'd started the process well before the collapse.

[FSogol]

3. Isn't that how condos work? The residents share the costs? n/t

[jimfields33]

14. Yes. But 15 million?

I wonder how much that is per condo. My HOA just assessed us 1,163 dollars per home (we have 2800 homes). That’s a reasonable ask.

[FSogol]

19. The condo assoication should have a rainy day fund or can take money out of other budgets. They

could borrow money and spread the assessments out of 10-15 years.

You can see the results of ignoring problems.

Look for more things like this to happen, not just in buildings, but in bridges, tunnels, etc. This country always ignores improving infrastructure.

[rkleinberger]

25. This isn't feasible. The HOA would have to take a loan to do this. No one would give such a loan.

HOAs are extremely under funded. This highlights the problem many HOAs are facing today.

[obamanut2012]

36. Owners there were able to take out 15-year low-interest loans

The collapse happened literally the week before this was due.

[progree]

20. There are 136 units. $15M/136 equals $110,000 on average, but there are different kinds of units

being assessed different amounts
https://kstp.com/national/before-shoreview-florida-building-collapse-millions-in-repairs-needed/6154739/

[PoliticAverse]

29. The problem is apparently 2 fold...

1 - Design/construction errors were made when the complex was built.

2 - Maintenance was put off and so monthly fees were lower than they needed to be.

[Escurumbele]

52. $15 million assessment comes down to 110,294.12 per unit

Progree is correct, 3 bd units will pay more than 2bd units, etc.

[Baitball Blogger]

5. There should have been assessments started years ago, in the same way that companies

set aside money to replace machinery.

[sop]

21. Fixed monthly association fees in a building like this can run upwards of $700 to $800 per unit.

The fixed monthly fees cover taxes, building insurance, 24/7 security, normal maintenance and repairs, salaries for employees, the professional management company cost and enough money to set aside a reserve to cover incidentals like emergency repairs to the pool, AC and other mechanicals.

Structural repairs have to be addressed by special assessments. These special assessments have to be approved by the entire association by vote. Special assessments are added to the fixed monthly fee, and paid over a set period of time, usually five years or longer. Most of these unit owners were probably paying off several special assessments already, for a host of needed repairs that cropped up over the years.

When you add the fixed monthly fees and special assessments to the mortgage and individual unit owners insurance, it makes better economic sense to rent.

[csziggy]

49. I read somewhere that the fees for the collapsed building were over $900 per month per unit

It makes sense that an older building would have increased costs for maintenance and repair. That this was not started immediately after the 2018 report is appalling - and had cost many lives.

Even if they had to wait for engineering studies and estimates, an increase in monthly fees in anticipation of the costs would have been wise. Of course it may have still not happened before this collapse given the reported acceleration in the deterioration of the structure.

[sop]

6. Who else would pay for it? It may not be fair, but it's their building, and their responsibility.

That's the problem with older condos like this; they start to fall apart and the majority of owners can't afford, or won't pay for $100,000+ in special assessments per unit to fix the problems. Unfortunately, many unit owners kept putting off making needed repairs till it was too late.

[llashram]

9. ok

[forthemiddle]

7. If your foundation in your house fails, you are responsible to fix it

Why would it be any different for these owners?
When you buy a property, you buy it with all it's flaws. It seems that all was very transparent, so the only people that really have an argument is those that have purchased since 2018 IF they were not told about future fixes.

[llashram]

10. hmmm

interesting logical truth

[obamanut2012]

37. They OWN it

Why should someone else pay to fix someone's home? Who do YOU think should pay for this?

They choose to save money until forced to have a huge assessment. Those who voted against maintenance over the years unfortunately paid with their lives, as well as others.

[Warpy]

34. Since it was water damage, insurance likely wouldn't pay

Someone posted here that the codo fees were astronomical, $900 was the figure quoted, although it most likely varied by unit. In addition, it seems to have been a fairly transient population of vacationers and long term renters, rather than stable families as was first presented. There was likely huge resistance to being assessed for extensive repairs on top of hefty condo fees.

There were warning signs but it doesn't seem any of them were severe enough to condemn the building and force repairs. However, that's what should have been done. Maybe the devastation and high loss of life will cause that to happen in the future when problems are found in other buildings.

Then again, it's Florida, so probably not.

[obamanut2012]

35. lol that's how it works -- of course it's fair

We just had a 1K assessment for roof repair on our villa condos. 1k is cheap for a new roof. They choose to own property much more expensive and difficult to maintain, and then mostly didn't vote to maintain.

You do know that's how this works, right?

[Deminpenn]

43. They collectively own the building and are responsible

for its continuing maintenance. No different really that what a single family homeowner faces in maintenance and upkeep costs.

[Thomas Hurt]

11. The building may catastrophically fail....let's send a letter!

[TheBlackAdder]

40. But first, let's sit on it for almost three years.

[FreepFryer]

12. Bad writing. I assume she isn't among those missing in the disaster. (Nt)

[femmedem]

13. I think it shows how we are (not) going to address climate change.

Warnings upon warnings of impending disaster, but because we don't know exactly when half the planet will become uninhabitable, too few people are willing to make the necessary sacrifices until it is too late.

[jimfields33]

16. Nobody know exactly what to do

We had the world shut down an entire year and it didn’t do much to save the world. What is the exact thing that must be done?

[JudyM]

22. We are at a crisis point right.now. There may not be a perfect, palatable solution but there are

some clear paths forward, and each of us can participate, as well as governments, as well as corporations. The adults need to be in charge, and we should be communicating what’s happening far more effectively. We can’t afford to look back and say we could’ve done more.

[sop]

27. Yeah, right. That's way too sensible, and you wouldn't want to be accused of that.

Better to squeeze out the last nickel of profit, and to hell with the future of the planet.

[femmedem]

53. Yes, there's no one thing to do.

And it's probably too late to prevent the world from becoming uninhabitable. There are a lot of things that add up that could buy us time, though, including generating clean energy, plugging methane leaks, making buildings more energy-efficient, reversing deforestation and having fewer children, especially in the developed world.

[brush]

15. Insurance companies won't touch condos, like homeowners have insurance?

[sop]

32. Condo associations normally have the same type of insurance as single-family dwellings.

It covers damage to the building from the usual named perils, like wind, rain, fire, lightning, etc. It also provides liability coverage if someone sues for negligence, like an injury from a slip and fall in a common area. Condo unit owners can also have individual policies to cover everything inside their apartment walls from the same named perils, like fire, lightning, wind driven rain, water damage, theft, etc., as well as liability coverage.

Such property “all risks” policies on a completed building do not normally provide protection for damage arising out of an inherent or latent defect in the building. Normal wear-and-tear or failure of mechanical systems and the structure are the responsibility of the property owner. Much like auto insurance won't cover a blown engine due to an oil leak or lack of maintenance, and the manufacturer won't pay for break downs after the warranty period expires.

Builders and contractors often have Latent Defects insurance (LDI). This provides coverage in the event of an inherent defect in the design, workmanship, or materials becoming apparent in the structure or waterproofing envelope of a building resulting in physical loss or damage. These policies generally cover the builder for a period of 10 to 12 years from the date of issue of final certificate of completion. After that, problems or damage caused by an inherent defect in the structure or waterproofing envelope will be the owner’s responsibility.

[brush]

33. Thanks for the info. Sounds like you're in the business.

So because the building is 40 years old any defect insurance has expired?

[sop]

44. I would assume that's the case, unless they try to go after the structural engineering firms

who conducted the recent evaluations in 2018 and 2020, alleging their warnings weren't strong enough, or their inspections were not thoroughly performed. Anything's possible in such a litigious environment. South Florida has more attorneys per square mile than just about any other place in the country.

These people would have been better off had the building collapsed during a Cat 5 hurricane passing directly over Miami Beach. They would have been ordered to evacuate the condo, and the collapse would have been fully covered, even if the place had been falling apart, which it obviously was.

(I supervised large loss litigation for a major insurance company for years.)

[PoliticAverse]

46. You sue everyone involved in any way that has "deep pockets". n/t

[sop]

48. Pretty much.

[obamanut2012]

38. I have the sdame insurance company as my parents

Who have a detached home.

Of course insurance companies cover condos

[brush]

45. Post 32 explains it well. Contruction defects may have expired as...

the building is 40 years old. I was wondering why the HOA and management company didn't go after the insurance companies years ago to get the damage repaired instead of letting it go.

[bucolic_frolic]

17. Can they float Condo Bonds and amortize the cost over 30 years in fees?

Everybody's paying another $137 a month now.

[BootinUp]

18. I would have needed horse tranquilizer

To go to sleep in that death trap.

[spike jones]

26. Off topic, but I took a horse tranquilizer many, many years ago.

A friend said that it produced an interesting trip, and that was all that was needed for me to check it out. It was a day of many surprises that included wine, weed, tubing on the river with the Hells Angels, and a hit of acid in the evening. Later I heard that the main ingredient in horse tranquilizer was renamed Angel Dust.

[BootinUp]

28. Sounds like I need a better allegory. Nt

[Hugh_Lebowski]

56. So, PCP in the AM, weed and wine in the afternoon, and a hit of acid in the evening?

Spike ... I gotta say ... you knew how to party in your youth, my friend lol ...

Never did any dust or smack, but you can pick most anything else and I tried it ... many of them in combination ... in my late teens/early 20s

[JudyM]

23. The engineer wasn't required to report what must have been major code violations?

If not, that licensing rule needs to change, at a minimum.

[rkleinberger]

24. There is no way the homeowners would be able to foot such an assessment.

One wonders if the HOA could have used their master policy to cover some of it (that is if they actually had one). Aside from the human tragedy, the HOA will abandon the building as it has no other choice leaving the individual owner with worthless properties. Hopefully, each owner has insurance coverage against their unit, but that will be minimal as the HOA would need to cover the full structure. No HOA can afford this kind of repairs. What this is shows is there needs to be reform in HOA regulations and guidelines. This is a problem for many HOAs across the country who do not have money to make major repairs to common structures and owner resisting the costs.

[Auggie]

30. And that's something to consider before buying a high-rise condo

[cinematicdiversions]

31. Condo's like this sell for many multiples of that amount.

I would be surprised if the majority of condo owners couldn't afford it. May not want to pay it I understand. But don;t have the money I am not buying.

Most people in such circumstances have access to 100k in a money market or even equity ion thier property.

[obamanut2012]

39. They were also allowing 15-year low-interest loand to cover it

And, not every unit owner was assessed 110K, some were much lower.

[NCjack]

41. Root causes.

- Most of the condo owners do not know the economics and responsibilities of condo ownership. Before they bought, they should have read a good book on that topic.

- Before signing the contract to buy the condo, each owner should have read the condo bylaws; all of the board's minutes, engineers' report, explanation of the special assessments, annual budgets.

- Also, the seller of the condo usually doesn't want you to read the settlement letter and the punch-list to be passed to the condo for completion.

- Look at the architectural plans. All of them. Do you know that there is the original plan that developer filed with the county? And, there is version 2, with the required changes (maybe it gets filed with the county). Next, there is version 3 in which that developer cuts corners, gives to the builder, and the county never sees. Finally, there is the version 4, which the builder makes by cutting his corners (cheats) and substituting lower quality materials shown in version 3 -- the developer and county never see this marked up copy of what actually happened (sometimes, as work continues up to the day the develop and first condo board settle, this copy is unintentially left behind in the clutter of builder).

- Since most have bought not knowing their pig-in-their poke, they are shocked to learn that the bylaws require the property be maintained at original standards.

Now, it is time to face the blunt facts. The condo building is constructed such that the major components will operate for 20-30 years before requiring replacement. A the first board wants to prop up value, so there is little to no assessments made to replacement reserves. After about 20 years, an aware board member will realize that there are no reserves.

Attempts to catchup are met with hostilities and threats. Owners who learn about the problem quietly sell and leave. Then all hell breaks loose.

The developer should pay these costs! Surprise -- try to find that person.

You may have noticed that I write this stuff with familiarity. It happened to me. In self-defense, I read all that I could find. Talked with the condo manager and engineer and management company. I learned that I had tied my most important investment to a group of people who have veto over my desires to protect my investment.

As for finding the devloper. In my case, he came from Europe with money. Paid for the construction, sold most of the units, and negotiated a settlement with the first condo board. Then, he disappeared. Nothing but rumours on his landing spot. Europe, Latin America?

My take on what happened in Florida: The Owners thought of themselves as Renters. Collectively, they wrecked themselves.

[PoliticAverse]

47. "tied my most important investment to a group of people"

This is the real problem with this type of large multi-unit condo complexes. The fate of your property depends on the good decisions made by a bunch of other people most of whom you know little about.

"major components will operate for 20-30 years before requiring replacement"

Finding out that all the in-ground support columns need to be replaced in your on-ocean building can be quite a sticker-shock.